Spyker sues GM for over $3 bln on Saab bankruptcy

Reuters

Reuters

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Wired World

07 Aug 2012 10:08 (South Africa)

Dutch sportscar maker Spyker NV is suing General Motors Co for more than $3 billion on behalf of its subsidiary Saab, accusing the U.S. automaker of deliberately bankrupting the Swedish group by blocking a deal with a Chinese investor. By Sara Webb and Anthony Deutsch.

Saab Automobile, one of Sweden's best-known brands, stopped production in May 2011 when it could no longer pay suppliers and employees. It went bust in December, less than two years after GM sold it to Spyker. GM's efforts to kill any sale were made to eliminate a potential rival in China, Spyker said.

"GM never intended to allow Saab to compete with it in China," Spyker said in its complaint, filed in the United States District Court of the Eastern District of Michigan.

"When Saab found a way to secure liquidity and continue as a going concern with the help of Chinese investors, GM was determined to scuttle the deal by any means necessary, including the publication of false information about its rights under the parties' contracts," Spyker added.

GM spokesman Dave Roman called the lawsuit "without merit." "We will vigorously defend the company against these baseless allegations," he said.

Spyker Chief Executive Victor Muller said GM "had it coming" with regard to the lawsuit.

"They never thought we would survive," he told Reuters. "Well, Spyker's still here. They assumed Spyker would end up in the graveyard with Saab, and obviously that didn't happen."

In asking for a jury trial, Spyker is seeking at least $3 billion in compensatory damages, as well as interest and punitive damages, and legal fees.

"GM's actions had the direct and intended objective of driving Saab Automobile into bankruptcy, a result of GM's ... interfering with a transaction between Saab Automobile, Spyker and Chinese investor Youngman that would have permitted Saab Automobile to restructure and remain a solvent, going concern."

He told reporters the $3 billion claim was based on what Saab would have been worth if a deal with Chinese firm Zhejiang Youngman Lotus Automobile Co, or Youngman, had gone ahead.

Spyker spent hundreds of thousands of dollars in litigation fees preparing the case over the past six months, Muller said.

Spyker's lawsuit was being funded by an anonymous third party, who will share in any settlement, he said.

An executive at Youngman declined to comment when asked if the Chinese company was involved in the suit.

"We are not aware of the situation. I have nothing to say about it," the executive said, declining to be identified.

Pang Qinghua, chairman of Pang Da, said his company was not involved in suit.

"Pang Da plays no part in the lawsuit in one way or the other. We have set aside provisions for our losses on Saab already," Pang told Reuters on the phone.

"As an auto dealer we will be focusing on car sales and strengthening our ties with manufacturers. But we might be interested in other acquisition opportunities in the future if the opportunity arises, although we won't take a controlling share," he said.

CHINESE INVESTORS

GM, which operates in China in a partnership with state-run automaker SAIC Motor Corp Ltd, late last year effectively blocked deals with Pang Da and Youngman.

GM said it would stop supplying vehicles and technology to Saab's new owners because it would run counter to the interests of its own shareholders. Saab filed for bankruptcy months later and stopped producing cars.

"GM created the appearance of initially encouraging Saab to enter into a deal with Chinese investors to save the company, only later to unlawfully pull the rug out from under Saab, driving it into bankruptcy liquidation," Spyker said in the lawsuit.

"Indeed, it was GM's intent by whatever means necessary to quash any financing or investment deal that could save Saab from liquidation, because GM simply sought to eliminate Saab from competition, particularly in the Chinese automobile market," the complaint said.

Spyker charged GM with interfering in a prospective deal with the Chinese companies by claiming it would no longer license its technology to or build cars for Saab even though the last agreement was structured to exclude the U.S. automaker's intellectual property, according to the lawsuit.

Saab had created its own vehicle platform that did not use any GM technology, so GM's statements that it would not support a deal were "intentionally false" because such support was not needed, Spyker said in the lawsuit. Spyker also said in the lawsuit that the agreement for GM to supply parts and build the Saab 9-4X SUV ran through 2014 and was not subject to termination "for convenience" by either company.

Saab, which had been making cars since 1947 and built a small, loyal following, was declared insolvent with debts of about 13 billion Swedish crowns ($1.93 billion), around 2.2 billion of which is owed to the Swedish Debt Office.

GM bought 50 percent of Saab in 1990 and the rest 10 years later. It decided to sell the brand in 2009 after the financial crisis and came close to closing it before Swedish Automobile, then called Spyker Cars, bought Saab in January 2010.

Despite its well-known name, Saab was a niche player whose future had been questioned by analysts. Saab was profitable in only one of the 19 years GM owned it, executives with the Detroit automaker have said.

Following Saab's bankruptcy, Sweden's bankruptcy administrators said they had chosen a consortium called National Electric Vehicle Sweden (NEVS) AB to buy Saab for an undisclosed sum. Muller said that deal was between the receivers and NEVS. DM

Photo: Better days - Spyker Chief Executive Victor Muller (L) shakes hands with Saab CEO Jan-Aake Jonsson after they announced that Spyker would buy Saab from General Motors in a deal worth $400 million in Stockholm January 26, 2010. REUTERS/Bob Strong

Thomson Reuters is the world's leading source of intelligent informatiom for businesses and professionals. It combines industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare, science and media markets.

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